Can an Employee Request a Settlement Agreement?

Yes, an employee can request a settlement agreement at any time, and it happens far more often than most people realise.

Employers usually make the first move, but nothing in law prevents you from raising it yourself. What matters is how you ask. A well-handled approach can open the door to a fair exit package, while a badly handled one can weaken your position.

In this guide, we explain when it makes sense to ask for a settlement agreement, how to raise it safely, and what to include in your request.

The short answer: yes, and it happens more than you think

A settlement agreement is a voluntary, two-way arrangement. No rule says your employer has to move first. And no part of the process changes because you raised it rather than them.

In practice, employers often welcome the request. An employee proposing a settlement signals a situation that can be resolved around a table, rather than one heading for an Employment Tribunal.

Of the 20,000+ settlement agreements we have advised on, a meaningful share began with the employee making the first move. Asking is not unusual. It is often the smartest way to take control of a situation that is not working.

When does it make sense to ask your employer for a settlement agreement?

Asking your employer for a settlement agreement makes sense when staying in your role no longer works, but simply resigning would leave you worse off.

The most common trigger situations are:

• You are being managed out. Unreasonable targets, sudden performance criticism after years of good reviews, or being quietly sidelined are classic signs. A settlement agreement lets you leave on agreed terms rather than waiting for the process to run its course.
• The working relationship has broken down. Unresolved grievances, ongoing conflict with a manager, or workplace tension with no realistic fix.
• Long-term ill health. Where returning feels unrealistic, a dignified, agreed exit can serve both sides better than a drawn-out absence process.
• A potential claim exists. Constructive dismissal, discrimination, or whistleblowing situations give you leverage, and a settlement lets you use it without the cost and uncertainty of a tribunal.
• You want a clean break. An agreed reference and a financial cushion beat a bare resignation every time.

The strategic point running through all of these: the stronger your potential claims, the stronger your negotiating position. That is what determines whether your employer engages and what a reasonable settlement agreement looks like in your case.

How do I ask my employer for a settlement agreement?

The way you ask for a settlement agreement can make or break your negotiating position. Follow these six steps to raise it safely:

1. Take legal advice first

Before opening a conversation with your employer, get settlement agreement legal advice from a solicitor. They will assess your leverage and help you avoid any mistakes that may weaken a negotiation before it starts.

2. Request a protected conversation (label it without prejudice)

Under section 111A of the Employment Rights Act 1996, discussions about ending your employment cannot be used as evidence in an ordinary unfair dismissal claim.

Here is the nuance that matters: s.111A does not cover discrimination, whistleblowing, or other claims.

That is why your request should also be marked “without prejudice”. The two protections together give you the widest cover. The ACAS Code of Practice on settlement agreements sets out how these conversations should be handled.

3. Keep your evidence separate

If you have a grievance, submit it openly and make your settlement offer in a separate letter marked without prejudice.

If a deal is reached, all good. If not, your grievance can be used as potential evidence at tribunal. Open correspondence is on the record. Negotiation correspondence is off it. Never mix the two in one document.

4. Make the approach in the right register

Keep the tone constructive rather than confrontational. You are proposing a resolution that benefits both sides, not issuing an ultimatum.

Example approach: “I would like to have a without prejudice and protected conversation under s.111A about my future with the company. I think there may be a way to resolve the current situation that works for both of us.”

5. Put a realistic figure on it

Anchor your proposal to your notice pay, any redundancy entitlement, and the value of your potential claims. A figure plucked from the air is easy to dismiss. A figure built on your actual entitlements is not.

6. Keep working normally

Do not resign. Do not down tools. Do not assume the deal is done until the settlement agreement is signed. Your strongest position is as a professional employee your employer would rather part with on good terms.

A word of caution: the protection under s.111A is lost where there is “improper behaviour”, such as threats or undue pressure. Keep every interaction measured, and let your settlement agreement solicitor handle anything contentious.

What happens after you ask your employer for a settlement agreement?

Once you’re asked your employer for a settlement agreement, there are three realistic outcomes:

1. They engage

This is the most common outcome where genuine issues already exist. Your employer comes back with an offer or an invitation to discuss terms. Negotiation follows, and once terms are agreed, the formal settlement agreement is drawn up and you take independent legal advice before signing.

2. They ask for time

Entirely normal. Your employer may need to consult HR, senior management, or their own legal team before responding. Agree on a follow-up date so the conversation does not drift.

3. They say no

A refusal changes nothing legally. Your request is not a resignation, and your employment rights remain fully intact. If the underlying issues continue, you may still have grounds for a tribunal claim.

Watch the clock: claims must normally be started within three months less one day of the act you are complaining about, and ACAS early conciliation is a mandatory first step before any claim can be issued.

Will asking for a settlement agreement backfire?

Asking for a settlement agreement will not backfire legally if you raise it properly. A request made in a protected conversation, marked without prejudice, cannot be used against you in an ordinary unfair dismissal claim.

The honest answer is that the risks are practical rather than legal:

• The relationship can cool. Your employer now knows you are considering leaving.
• Your cards are on the table. If no deal is reached, you stay in the role with your intentions known.

Both risks are manageable:

• Take legal advice before you approach. Fully understand your position before your employer knows your plans.
• Frame the request constructively. A proposed resolution lands very differently to an ultimatum.
• Keep performing your role as normal. Your professionalism is part of your negotiating strength.

And weigh the alternative honestly. Staying silent in a deteriorating situation carries its own cost: months of stress, a weakening position, and quite often, the same exit on worse terms.

What should I ask for in a settlement agreement?

Your request should cover everything you are owed, plus what your circumstances justify on top. A well-constructed settlement agreement proposal includes:

• Notice pay, whether worked or paid in lieu (PILON)
• Accrued holiday pay up to your leaving date
• Redundancy entitlement, where redundancy is the reason for your departure
• An ex gratia payment reflecting the strength of your potential claims and your length of service. The first £30,000 is usually tax-free
• An agreed reference, with the exact wording locked into the agreement
• Employer-funded legal fees, which is standard practice and typically £350 to £500 plus VAT

To get a realistic starting figure for your situation, use our settlement agreement calculator. It takes less than a minute and gives you an instant estimate to anchor your negotiation.

Settlement agreement – FAQs

Contact GTE Settlement Agreements today

Ready to sign or still deciding how to raise it? Our settlement agreement solicitors will assess your position and help you leave on good terms.

• Your employer pays our fees, so you pay nothing
• We only act for employees, not employers
• Most settlement agreements are completed within the hour
• Available today, wherever you are in England and Wales

Call us now on 020 7247 7190 or make a free enquiry online.